November 24, 2009

 

CBOT Corn Review on Monday: Pulls back, settles lower as funds sell

 

 

Chicago Board of Trade corn futures gave back early gains and closed modestly lower Monday amid fund selling.

 

December corn finished 3 3/4 cents weaker at US$3.87 1/4 per bushel. March corn slipped 3 3/4 cents to US$4.03 1/4.

 

Funds appeared to take some profits after a run-up in prices, said Sid Love, analyst for Kropf & Love Consulting. Commodity funds had sold an estimated 7,000 contracts at the end of the day session after buying in earlier dealings.

 

Corn felt early strength from fund buying, weakness in the U.S. dollar and gains in neighboring CBOT soy, traders said. Support from other markets waned, they said, with soy eventually settling lower.

 

December corn seemed to run into resistance again around US$4, said Jason Britt, president of Central State Commodities. The nearby contract in electronic trading hit a session high of US$4.03 before trimming gains. March corn faces resistance around US$4.20 to US$4.25, Britt said. It hit a session high of US$4.19 on the screen.

 

Hedging may have added pressure to corn prices as the U.S. harvest continues to advance, Love said. The U.S. Department of Agriculture will issue a harvest update at 4 p.m. EST in its weekly crop progress report. Harvest should be 65%-72% complete, up from 54% complete a week ago, analysts said.

 

Parts of the U.S. Midwest will turn wet this week, but conditions should remain generally favorable for combining, according to MDA EarthSat Weather.

 

"We're making some progress getting the crop out," Love said. "There's going to be rain around this week, but I don't think it's going to be anything torrential."

 

Weekly U.S. corn export inspections of 25.562 million bushels were below trade expectations of 29 million to 34 million. Soy inspections, by contrast, were "big," a CBOT floor analyst said. Soy have seen strong demand lately, notably from China.

 

"You certainly can say that we're running soy out really fast, and that's great," Love said. "But we're certainly not doing it with corn or wheat."

 

In other markets, ethanol futures closed mostly higher. December ethanol rose US$0.011 to US$2.102 per gallon, and January ethanol was up US$0.008 at US$1.987.

 

CBOT oat futures slipped slightly. December oats lost 3/4 cent to US$2.57 1/4 per bushel, and March oats dropped 3/4 cent to US$2.70 3/4.